The economy starts at the steady state. Which of the following changes will increase short-run output on impact? Select one: a. An increase in the parameter governing how aggressively monetary policy responds to inflation. O b. A decrease in the target rate of inflation. O c. A decrease in the parameter governing how aggressively monetary policy responds to inflation. O d. An increase in the target rate of inflation.

The economy starts at the steady state. Which of the following changes will increase short-run output on impact? Select one: a. An increase in the parameter governing how aggressively monetary policy responds to inflation. O b. A decrease in the target rate of inflation. O c. A decrease in the parameter governing how aggressively monetary policy responds to inflation. O d. An increase in the target rate of inflation.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Which one of the following is NOT true about the costs of inflation to society? O Unexpected higher inflation rate hurts lenders. O Higher inflation rate increases the cost of printing menus and catalogues for businesses. Higher inflation rate creates general inconvenience to the public Unexpected higher inflation rate hurts borrowers O Higher inflation distorts individuals' tax liabilities
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During periods of volatile inflation, there is O a. certainty about the price of one good relative to another. O b. less uncertainty C. important information O d. greater uncertainty O e. no information
Give proper explanation and solve all parts will definitely upvote. Hand written solution is not allowed.
Starting with a long run equilibrium, a Fed policy insisting on an even higher GDP may lead to a higher inflation only. O a surplus in the labor market in the short run. lower wages in future. a higher GDP per capita in the long run.
10. Which of the following statements is true? a Cost-push inflation occurs as prices rise because of a rise in per-unit cost of production (unit cost = total cost/units of output). With cost-push inflation, prices rise but output falls. b Rising costs reduce profits and the amount of output firms are willing to supply at the current price level. As a result, the economy’s production of goods and services declines and the price level rises. c Supply shocks have been the major source of cost-push inflation. Supply shocks occur when there are dramatic increases in the price of raw materials or energy. d All of the above. e Only a) and b)
Consider the short run and the long run and then choose the statement that is correct. O A. The real interest rate is independent of the inflation rate in the long run. B. The real interest rate is dependent on the price level in the long run. C. In the short run, money market equilibrium determines the price level. D. In the short run, other things remaining the same, a given percentage change in the quantity of money brings an equal percentage change in the price level.
In a monetary economy with flexible prices, a temporary contraction of the quantity of money will cause Select one: O a. An increase in the nominal interest rate O b. O c. A proportional fall in the price level More inflation in the future, unless it is accompanied by fiscal adjustment O d. two of the other
Output growth will equal O when which of the following conditions is satisfied? Select one: a. 0% nominal money growth; 2% inflation. O b. 2% nominal money growth; 2% inflation. O c. 3% nominal money growth; 0% inflation. O d. -2% nominal money growth; 1% inflation. O e. None of the above.
1st attempt Assume that people in the economy have adaptive expectations. If the inflation rate has been stable at 2% in each prior year (because of passive monetary policies) and the central bank wants to lower unemployment, which policy should it implement? Choose one: O A. a policy that makes the inflation rate less than 2% O B. a policy that makes the inflation rate equal to 2% O C. a policy that makes the inflation rate greater than 2%
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Five O Otner Bo Inflation VPC 4. 3 1. ye Output Figure 2 The Vertical Phillips Curve Figure 2 represents an economy in which the target rate of inflation is 3%. In the absence of any policy intervention, which one of the following statements correctly describes the future direction of inflation in the economy if it is at point Z on the diagram. Select one: O Inflation will rise further away from its target level. O Inflation will not change. O Inflation will rise towards its target level. O Inflation will fall further away from its target level. O Inflation will fall towards its target level. MacBook 00 DD 000 F4 F5 F6 F7 F8 F9 F10 云